ADAMSON UNIVERSITY

“CHALLENGES AND OPPORTUNITIES OF E-INVOICING IN THE

PHILIPPINES: A GUIDE TOWARDS A BETTER TAX COMPLIANCE”

A Thesis

Presented to the

Faculty of the College of Business Administration

Graduate Studies

Adamson University

in Partial Fulfillment

of the Requirements for the Degree

Master in Business Administration

MC JOHN REY A. CABALLES, CPA, CFMP

2022
 2

ADAMSON UNIVERSITY

ACKNOWLEDGEMENT

First and foremost, I would like to thank Our Lord God Almighty for guiding me all

throughout the research period. His Divine Providence has given me courage, strength, and

wisdom to push through this endeavor.

Secondly, I thank my parents for their undying love and support that fuels me to go

beyond my limits and become better versions of myself as young professionals.

My earnest gratitude to my adviser/mentor, Dr. Maria Nimfa R. Diaz for her exemplary

support and valuable feedback throughout the duration of the research. Her perceptive and

objective criticisms have help me get through the whole process of this study.

A warmest thank you to the College of Business Administration Dean, Dr. Nayve, CBA

staffs, my classmates and colleagues for their immense support, encouragement and generosity in

sharing their ideas to boost my drive accomplishing this paper.

To my friends/officemates from Cinco Group, I am more than grateful for the support

you have poured unto me.

Veritas in Caritate - Truth in Charity

 3

ADAMSON UNIVERSITY

TABLE OF CONTENTS
Title Page i

Acknowledgement ii

Table of Contents iii

CHAPTER I

1.1. Background of the Study

1.2. Statement of the Problem

1.3. Hypotheses

1.4. Scope and Limitations

1.5. Significance of the Study

1.6. Definition of Terms

CHAPTER II

2.1. Related Literature

2.2. Synthesis

2.3. Theoretical Framework

2.4. Conceptual framework

CHAPTER III

3.1. Research Design

3.2. Data Management

3.3. Sampling Design

3.4. Statistical Treatment

APPENDIX I. SURVEY QUESTIONNAIRE

REFERENCES
 4

ADAMSON UNIVERSITY

CHAPTER I

Background of the Study

In the Philippines, a clearance technique has been used, and the electronic invoice system

(EIS) mandates that an electronic invoice be issued to the recipient and that the tax authority be

informed of the invoice's details (XML format). This comprises sending an invoice report to the

government's main platform, also known as Continuous Transaction Control (CTC), an invoice

reporting and monitoring system based on the South Korean model that assisted the Philippines

in creating its electronic invoice reporting system. Accounting records like as invoices, receipts,

debit notes, and credit notes are all included in the electronic invoice system (EIS).

The upcoming implementation of the Electronic Invoicing/Receipting System (EIS) is

anticipated to open opportunities for easier compliance monitoring, extending the tax base, and

increasing tax collections—all things the government desperately needs to continue responding

to the pandemic and recover from it. The Tax Reform for Acceleration and Inclusion Act

requires that the Bureau of Internal Revenue (BIR) prepare for and carry out the transition from

paper-based to electronic invoice issuance, beginning with the pilot implementation of the EIS

on July 1, 2022, and the full implementation of the EIS on January 1, 2023. The Korea

International Cooperation Agency has awarded a $7.3 million grant to support development. The

following were listed as the key traits of the Korean model in a 2016 report titled "Critical

Success Factors of the Web-based Tax Invoice System in Korea": (1) - penalties are set for

failing to issue and/or submit e-tax bills electronically, and the system is similarly implemented

for all corporate taxpayers regardless of sales volume and type of business; (2) Some individual

taxpayers must provide e-tax invoices if their supplied value was 1 billion Korean won (KRW)

or more in the year prior (200 million KRW or more commencing this July); (3) methods for
 5

ADAMSON UNIVERSITY

generating e-tax bills were developed for all categories of taxpayers, and they are easily

accessible and fair to taxpayers regardless of their IT environment; (4) real-time transmission of

all tax invoices to the tax authority; and (5) Since all transactions are smoothly completed

electronically and fundamental information, such as the tax identification number, registered

name, etc., is preregistered with the tax authority, submitting VAT returns is simpler and there is

no need to prepare the summary table.

The BIR will initially launch the implementation in the Philippines with 100 large-scale

taxpayers who are able to issue e-tax bills through their computerized accounting systems. The

EIS Taxpayer Portal, EIS Certification Portal, and the EIS Portal for Revenue Officers have all

been built thanks to the efforts of the EIS team and concerned BIR divisions.

The launch of the EIS Taxpayer Portal is positive news. The facility issues e-invoices/e-

receipts, saves and processes the necessary sales data that will be communicated to the BIR, and

can be used by the public as an alternative e-tax-invoice system. It is comparable to the model

system, which motivates compliance by offering small businesses and individuals without

enough IT infrastructure a free website in exchange for their cooperation.

The digitalization of assessment records and broad reception of advancements have been

key elements of duty organization modernization in many emerging nations. One such

mechanical development is the exchange of receipt data among firms and their providers through

a computerized medium (e-invoicing). Not at all like conventional, paper-based solicitations, has

e-invoicing contained charging and installment information in a machine-clear organization that

can be imported straightforwardly into creditor liability frameworks and shared naturally with

the duty authority. Attracted by the possibility to reinforce charge consistence and diminish

exchange and observing expenses, in excess of 50 nations all over the planet have previously
 6

ADAMSON UNIVERSITY

carried out e-invoicing for the worth added charge (Tank), remembering ten nations for Latin

America and the Caribbean district (Barreix and Zambrano, 2018). While studies have found an

immediate effect of e-invoicing reception on charge consistence and firm way of behaving, there

is meager proof of circuitous impacts (spillovers) of e-invoicing reception by firms on

exchanging accomplices the store network.

Taxpayers may benefit from electronic invoicing in a number of ways, such as cost

savings (due to reduced printing, storing, and administrative costs), improved information

security and accessibility, and integration of invoice issuance with other internal (accounting,

payment, and billing) and external processes (such as accounting, payment and procurement

systems of suppliers, clients and the public sector). Tax administrations may also be able to

reduce sales omission, purchase over-invoicing (including the reporting of purchases that are

unrelated to business operations), fraudulent transactions, and general tax submission errors by

strengthening control over the invoicing process and enabling real-time monitoring of taxable

transactions, thereby reducing tax non-compliance and informality at a lower cost.

By supplanting more bulky paper-based processes, e-invoicing guarantees various

advantages for firms and the assessment specialists the same, including lower authoritative and

consistence costs, better reconciliation of charging and installment frameworks, and further

developed precision and data security. For charge organizations, e-invoicing likewise conveys

ongoing data that could be utilized to reinforce and computerize consistence checks. Regardless

of it is far and wide reception, observational proof on what e-invoicing means for firm

consistence and execution is restricted, particularly in arising economies. This paper adds to the

writing on digitalization and assessment consistence by involving managerial duty information

and semi trial variety in the obligatory carry out of VAT e-invoicing in Philippines.
 7

ADAMSON UNIVERSITY

The change will encourage greater voluntary compliance, cut compliance costs, and

increase openness in tax reporting, all of which are positive developments for taxpayers.

Additionally, it will assist the government in achieving financial goals that support the nation's

development.

Statement of the Problem

The study will focus on the challenges and opportunities of electronic invoicing processes

in the Philippines. By means of holistic approach that harmonizes the institutional and legislative

approach and the normative and cognitive approach in effectively raising tax compliance.

Specifically, it will answer the following questions.

1. What is the profile of the respondents in terms of:

1.1 Name of Company

1.2 Age

1.3 Gender

1.4 Tax Expertise

1.5 Highest Educational Attainment

1.6 Years in Service

2. How the level of Challenges of adopting technology in Tax Revenue System may can be

describe?

3. How the level of Opportunity of adopting technology in Tax Revenue System may can be

describe in terms of:

3.1 Perceived Usefulness

3.2 Perceived Ease of Use

 8

ADAMSON UNIVERSITY

4. Does Challenges on Implementation of e-invoicing significantly influences Opportunities

of Taxpayers via e-invoicing of filing Tax Revenue System?

Hypotheses

The following hypothesis of the study will be tested at p-value of .05.

Null Hypothesis: The Challenges on Implementation of e-invoicing do not significantly

influences Opportunities of Taxpayers via e-invoicing of filing Tax Revenue System.

Alternative Hypothesis: The Challenges on Implementation of e-invoicing significantly

influences Opportunities of Taxpayers via e-invoicing of filing Tax Revenue System

Scope and Limitations

In Philippines, charge workplaces whose exercises are being managed by regulation. The

study only focuses on the challenges and opportunities of electronic invoicing processes in the

Philippines. By means of holistic approach that harmonizes the institutional and legislative

approach and the normative and cognitive approach in effectively raising tax compliance.

The study is limited due to the following constraints:

Time factor: the time of accommodation of this venture is extremely short, consequently

compelling the analyst to rush the undertaking as opposed to doing it in advantageous time.

Additionally there is no sufficient time for the analyst to visit other foundation of government for

more data as respected to the difficulties of duty assortment.

Lack of asset: the scientist found it challenging to go round the different services and

parastatals in paying cash to counsel various reading material and gave by the board.
 9

ADAMSON UNIVERSITY

Lack of enterprise: A portion of the staffs of the leading group of interior income would

not unveil data with respect to their workplaces, they considered it as a gamble that trying to give

out data, and their occupation might be in harm's way. Some viewed as the examination as an

attack of their security likewise other would not give some reality which they considered as the

executives mystery.

Significance of the Study

Tax collection is a urgent element to the monetary and modern improvement of any

country. For there to be viable execution of the public authority there should be an ID of a strong

and feasible income base without which the fantasies of financial improvement in any country.

Even with the ongoing financial downturn this venture work will be of advantage of

citizen since it is intended to cause them to understand that installment of expense in a sensible

activity, and that their wellbeing are not being redirected to inappropriate channels. This will go

to teach feeling of having a place in the public authority consequently decreasing tax avoidance

and duty evasion and other endemic issue.

The advantages determine is government will actually want to have more finances close

by to execute project that is vital to individuals for example arrangement of power, development

of streets, working of schools and clinics working of public market given out to individuals,

arrangement of line borne water. Given out of bursary and grant to understudy and so on. The

Philippine government gets little sum from the national government to back both capital

intermittent consumption. It is hence essential for the public authority to search internally on the

most proficient method to work charge assortment inside.

 10

ADAMSON UNIVERSITY

Definition of Terms

The proper evaluation of the difficulties of duty assortment and its application in open area, it is

appropriate to familiarize with a portion of the words that will be much of the time utilized in

this review.

BIR: Leading group of inner income, This is a legal body set up by the state government under

the service of money, its obligations is to oversee charge regulation and evaluation of expenses

and other income age.

Challenges: Hindrances and problems that tax payers and tax officials might experience.

Edict: This is that administration on specific issues, it very well may be a profession on how tax

collection could be directed and charged or how government is to work her income for a specific

period.

Electronic Taxation: Automated processes are gradually phasing out manual tax administration

globally.

Idiosyncrasy: A people specific perspective, acting and so on. That is plainly not the same as

others.

Opportunity: Advantages that tax payers and tax officials will experience in adopting

technology in taxation system.

Payee: pay as you acquire, this is the arrangement of expense forced on government employees’

compensation. It is an immediate derivation from laborers compensation as per their grade or

level in office.

Perceive Usefulness: The subjective perception of users where they believe that using certain

technologies can improve the performance of their work.

 11

ADAMSON UNIVERSITY

Perceive Ease of Use: The degree to which a person believes that using a particular system

would be free of effort.

Public area: An organization that is claimed by the, public authority and it have a place with the

overall population.

Private Area: A business association that has a place with private or individual in our general

public.

Tax: is an evaluation by an administration to individual and firm to empower the public

authority raise income to deliver administrations to general society.

Tax avoidance: This is the purposeful endeavor not to make good on charge. It is unlawful

technique for diminishing ones use or upsets assessing ones pay or non-statement of pay and in

right.

Taxation: The means of fund-raising by or through charges.

Tax Payer: The people who pay duty to the public authority or authority.

Tax evasion: is rehearses by citizen, who have report their expense for example the people who

enjoy taken benefit of conditions that are not plainly characterized in the law or can bear

different understanding.

Tax rate: this is the level of their worth of the duty base that should be covered as expense.

Technology: The application of scientific knowledge to the practical aims of human life or, as it

is sometimes phrased, to the change and manipulation of the human environment.

 12

ADAMSON UNIVERSITY

CHAPTER II

Related Literature

This chapter presents the related literatures completed by various authors which shed

light to the understanding of the study. Data and information were obtained from books, journals,

periodicals, magazines, unpublished theses and online sources.

Tax

According to Law of General Provisions and Tax Procedure Number, 28 in 2017, Article 1

Section 1, it was stated that the definition of tax was a mandatory contribution for the country

that is owed by a person or institution that is constrained by law and that is owed by them and

used for the country's necessities, primarily for the prosperity of society. SI Djajadinigratin's

proposed definition of tax "Tax as a required to pay some of riches into country treasury

produced by specific situation, occurrence, and conduct of those who give the certain position,"

according to Resmi's book. Conclusion that may be drawn from these numerous meanings is

drawn that tax is collected in accordance with the authority of the law and the regulations

governing its application; it is impossible to demonstrate the existence of individual contracts

when paying taxes. Tax is also collected by the country, whether it is the central government or

local governments.

Tax administration system

Any function, system, or organization that relates to tax administration is included.

Quality and quantity of human resources as a system are one of the performance indicators in tax

administration. The reason tax administration is significant is because it serves as a service point

that provides excellent service to society as well as a tool for enforcing laws details relating to
 13

ADAMSON UNIVERSITY

taxes. Tax system is a mechanism of managing the tax debts of tax payers so that they can be

paid to the national treasury.

When used broadly, tax administration refers to managing and providing for the rights

and obligations of tax payers, whether the managing and providing takes place at the tax office

or at the taxpayer's location. Tax administration can refer to a function, a system, or an

institution. Tax administration covers the planning, organizing, transporting, and controlling of

taxes as a function. As a system, tax administration consists of a number of components

(subsystems) that include infrastructure, law, regulation, and taxpayers. Executing their duties

and functions in order to accomplish a specific goal. Tax administration is an institution that

oversees systems and puts in place tax procedures.

e-Filing Tax system

Through the modernization of the tax code, reform in the administrative sphere is

accomplished administration. The program's basic idea is the modification of apparatus thought

and attitude patterns as well as organizational value arrangements. As a result, the Directorate

General of Tax can become an establishment with a respectable reputation in the eyes of society.

Existence of administration modernization consists of four main points: restructuring

organizations based on functions and segmenting taxpayers into principal implementation

segments; de-bureaucratization of services through organizational structure implementation

based on function; perfecting business processes through optimizing communication and

information technology employment that leads to full automation; and perfecting human

resources management system through human resources.

 14

ADAMSON UNIVERSITY

The Directorate General of Tax consistently works to improve service, system, and its

existing mechanisms as well as information in order to achieve good governance and great

service to society combining technology, organizational change, and human resources.

Modernization of the administrative process (tax administration).

 Developing data processing center and call center

 Refining business process

 Writing 1900 SOP in the environment of Directorate General of Tax

 Implementation of e-System: e-Filing, e-SPT, e-Payment and e-Registration

 The purposes of e-FilingTax modernization

 The purposes of Tax modernization is to answer the background of e-Filing tax

modernization they are.

 To achieve high rate tax compliance

 To achieve high rate of trust towards Tax administration

According to Nasution, the goals of modernization that are sought to be reached include

boosting taxpayers' voluntary compliance, increasing society's trust, and increasing productivity

and integrity of the tax apparatus. A complete and all-encompassing plan for tax administration

reform must be created in order to realize them all. Changes made include those to fields like:

 Organization structure

 Business process and information and communication technology

 Human resources management

 Implementation

 Good governance
 15

ADAMSON UNIVERSITY

Pertinent past review with this review was finished by Havid, entitled the effect of e-

Recording execution towards Consistence of Citizens (Overview Concentrate in Assessment

Office of Bandung Cibeunying). The consequence of the review shows that e-Recording

execution in Essential Duty Administration Office of Bandung Cibeunyinghas impact towards

the pace of consistence of Citizens with connection heading is positive. It implies that e-

Documenting execution which gets better will build the consistence of Citizens then again awful

e-Recording execution will diminish the consistence of Citizens which can be made sense of or

impacted by the execution of e-Recording in Essential Duty Administration Office Bandung

Cibeunying. There is likewise study was finished by Ni Putu Ira Prananti, entitled The Effect of

Modernization of Duty Organization, Assessment Device Administration and e-SPT Work in

Duty Consistence. The outcome shows that Duty organization modernization framework, charge

device administration and e-SPT have positive effect towards the pace of corporate assessment

consistence. One more review was finished by Firdaus Aprian Zuhdi, entitled The Effect of e-

SPT Execution and Assessment Information towards consistence of Citizens (Concentrate on

Available Business person Enrolled in Duty Office of Singosari). Consequence of synchronous

assessment shows that e-SPT execution and Duty information have critical impact towards

consistence of citizens. In halfway assessment, the got result is e-SPT execution and duty

information fundamentally impact the consistence of citizens.

Use of Technology

In Information Technology (IT), apparatuses, gear, and assets are utilized to cooperate

with each other, as well likewise with others, and to deliver, make due, and share data (Anwar

and Climis, 2017). The expression "data innovation" alludes to a gathering of advances that

incorporate equipment like PCs and modems, as well as programming, for example, PC projects
 16

ADAMSON UNIVERSITY

and cell phone applications, as well as organizations like remote interchanges and the Web

(Anwar and Louis, 2017). They are fundamentally worried about the assortment, handling,

putting away, and sending important data to help the administration activities of any association,

including government organizations, and are involved equipment like PCs and modems, as well

as programming like cell phone applications (Anwar, 2015). People who are related with

establishments or government frameworks can profit from a framework that gives precise history

data, current status data, and anticipated data, which is all precisely expressed (Anwar and

Shukur, 2015). As per Anwar and Abd Zebari, (2015), data innovation is favorable in the space

of decision making since it can screen and analyze framework aggravations all alone, decide a

game-plan, and make a move to bring the framework back into balance. The accompanying parts

are remembered for the development of future arranging data innovation as indicated by Anwar

and Surarchith, (2015): individuals, information handling, information transmission, data

framework and recovery, and framework arranging (Anwar, 2017). The tax collection

framework, as per Anwar and Louis, (2017), is a strong and conceivably monetarily balancing

out instrument that states of countries might use to build improvement objectives while likewise

keeping up with monetary dependability in their nations. The significant target of duty

organization across the world is to produce income to back government consumption on friendly

government assistance, which incorporates safeguard, the rule of law, medical care

administrations, and instructive open doors for occupants (Anwar, 2015). As well as subsidizing

capital activities, which are otherwise called customer spending, charge income may likewise be

utilized to support purchaser spending, which incorporates the advancement of social and

financial foundation that will work on the nature of individuals' lives (Hameed and Anwar,

2018). Past its essential capability, tax collection can likewise be utilized as a basic instrument in
 17

ADAMSON UNIVERSITY

any country's economy to advance venture using tax cuts, motivators, or other alluring expense

exclusions that enticement for both homegrown and unfamiliar financial backers in regions like

assembling of buyer items (Abdullah et. al. 2017), send out handling, and oil and gaseous petrol

creation.

Perceive Ease of Use

It is likewise standard practice to utilize tax collection as equipment to beat explicit sorts

of standoffish direct down in the local area. Utilization of liquor, smoking, and pool wagering are

all occurrences of hostile to social direct that can be diminished by the burden of higher

assessments on the assembling of these products in any case (Anwar and Balcioglu, 2016). As

per Anwar, (2016), a sound expense framework should be in view of the accompanying ideas to

be successful: In request to ensure that citizens agree with the expense regulations furthermore,

that charge directors work productively, the viability of an expense not set in stone by its ability

to advance the moral standards of amazing skill, receptiveness, responsibility for activities,

honor, and productivity in the gathering of assessments. Straightforwardness (Anwar, 2017): A

straightforward, adaptable, and versatile duty framework, as well as the expense regulation,

ought to ensure that citizens follow the regulation while charge directors work effectively; lack

of bias, which recommends that a decent duty framework ought to be liberated from any kind of

bias; economy, which suggests that a decent expense framework ought to improve what is going

on rather than more awful (Anwar and Ghafoor, 2017); and reasonableness, which infers that a

decent duty framework ought to be without any sort of inclination. Like-wise implies the

shortfall of a predisposition in a decent charge framework, which proposes that a decent expense

framework ought to be without any type of bias (Anwar and Qadir, 2017). It isn't allowed to

affect the financial commitment of the taxpaying populace (Anwar, 2015). It is essential,
 18

ADAMSON UNIVERSITY

specifically, that both the consistence expenses to citizens and the authoritative costs to

government have no adverse impact on the aggregate sum of charges gathered at the public level

(Hamza et al. 2021). To be evenhanded, a reasonable expense framework can't be erratic, nor

should the sum payable be impacted by bias or individual opinions. This idea indicates that the

hour of installment, the way of installment, and the sum to be paid should be obvious to the

citizen as well as the burdening specialists (Sabir et al. 2021); comfort, then again, expects that a

decent expense framework be equipped for creating a resource for the citizen (Aziz et al.2021).

To find success in carrying out electronic recording and installment frameworks, Sorguli et al.

(2021) states that the accompanying circumstances should be met: solid and open network

access, helpful monetary establishments, a mechanically shrewd public, and satisfactory

financing to set up the important framework in charge workplaces (Ahmed et al.2021). e-

recording and e-installment frameworks should be integrated into a total data innovation plan,

improvement, and execution plan, as brought up by Ismael et al. (2021) to be viable. As Ali et al.

(2021) brought up, for e-recording to be powerful, the accompanying variables are required:

talented staff, a dependable IT framework, and a decent business environment (Gardi,2021). The

documentation of thoughts and activities, as well as wanted results and time periods for every

part, is the most important phase in the improvement of an essential marketable strategy for

electronic expense frameworks. This is finished while considering the qualities and shortcomings

of the expense organization, as well as ecological open doors and dangers (Qader et al. 2021).

Perceive Usefulness

It is additionally suggested that the plan contain a portrayal of the execution

methodology, which ought to incorporate the methodology for placing it into impact (Hamad et

al. 2021). Numerous nations have picked an organized way to deal with the presentation of
 19

ADAMSON UNIVERSITY

discretionary electronic recording and installment for specific portions of the citizen base, such

as people or organizations, as a component of a staged arrangement to consider live testing of the

framework in the beginning phases (Fatah et al. 2021). Citizens with explicit attributes, for

example, organizations, are obliged to document returns following the finish of testing (Ali and

Hamad, 2021). Moreover, a stable power supply, occasional workshops for citizens what's more,

charge experts on the framework's utilization, a solid, user-friendly, and promptly assessable site,

as well as a regulative structure, are expected for a fruitful electronic tax assessment framework

to be carried out (Hamad, 2018). For instance, Ali and Anwar, (2021) distinguished the

following as advantages of using data innovation to deal with the tasks and conveyance of

administrations by open area establishments: expanded managerial proficiency, viability, and

efficiency, further developed assistance conveyance quality (Anwar and Shukur,2015), and a

decrease in the organization, functional, and conditional expenses of public organizations

(Anwar and Abdullah, 2021). They too talked on the need of giving information at a decreased

expense. There are no words to communicate how significant IT sufficiently is in the field of tax

assessment (Abdullah and Anwar, 2021), with a few models being: a decrease in the above

expenses of dealing with the public authority organizations answerable for charge organization,

moment calculation of expense obligation through the utilization of online expense adding

machines, decreased cost of enrolling citizens and moment age of assessment ID number, a

decrease in staff-citizens plot as it relates to burden risk (Anwar and Shukur, 2015), a decrease in

the number of government forms recorded, a decrease in the quantity of expense returns

documented by people (Anwar and Abd Zebari, 2015). It is normal that building a data

innovation framework will bring about more prominent efficiency, further developed benefit

execution, as well as a more serious level of exactness in data, as per the examination of (Anwar
 20

ADAMSON UNIVERSITY

and Surarchith, 2015). Most firms that embrace data innovation see expanded efficiency, yet

there might be some efficiency misfortune during the "expectation to learn and adapt" period

(Anwar, 2017). Involving data innovation in charge organization can bring about an elevated

degree of malevolence toward charge installment, trash in trash out, which is the ascription of

mistaken calculates that will result in wrong estimation of assessment responsibility by online

expense number cruncher (Hameed & Anwar, 2018), unfortunate web access, deficient power to

drive have servers, significant expenses of keeping up with ICT offices, an absence of

specialized skill by charge organization organizations, and an elevated degree of indifference

with regards to burden installment (Abdullah et al. 2017).

Synthesis

Theoretical Framework

The Davis’ Technology Acceptance Model (TAM), which made its appearance in a PhD

thesis in 1985, has grown to encompass numerous results examining the adoption of Information

Technology (IT) across all spheres of human endeavor. According to TAM (Venkatesh and Bala,

2018), the intention to adopt IT is influenced by two beliefs: perceived usefulness (potential

benefits from adoption) and perceived ease of use (effectiveness and efficiency of

administration). This incorporates management and the results of technology adoption. The

model is created in order to demonstrate how user motivation, which is a behavior that can be

described or predicted by system features and capabilities, directly influences how people utilize

technology (Chuttur, 2019). TAM is used in this study to illustrate the impact of applying

technology to the taxation system and processes in both soft and hard ways on the user's purpose

(the administration efficiency and effectiveness, as well as tax revenue). Perceived ease of use is

conceptualized to describe the necessity of identifying the soft and physical infrastructure, as
 21

ADAMSON UNIVERSITY

well as the employees needed to bring about the user's desired incentive (revenue). The TAM

shows that the adoption of technology can only be accomplished by the purchase of essential

technological infrastructures and the availability of technological specialists for simple usage of

the acquired infrastructure. These two factors working together are anticipated to improve tax

administration's effectiveness and efficiency, which, according to TAM's model, is anticipated to

have an impact on the perceived incentive (tax revenue) driving technology adoption. How the

theory influences the variables is explained by the framework below.

Figure 1. Adoption of Technology Acceptance Model

 22

ADAMSON UNIVERSITY

Conceptual framework

INPUT PROCESS OUTPUT

1. Demographic Profile 1. Survey Questionnaire
1.1 Name of Company 1.1 Reliability Test Guide towards better
1.2 Age tax compliance.
1.3 Gender 2. Data Gathering
1.4 Tax Expertise Process
1.5 Highest Educational
Attainment 4. Statistical Treatment
1.6 Years in Service 4.1 Frequency and
Percentage
2. Challenges of adopting 4.2 Normality test
technology in Tax Revenue 4.3 Multivariate
System Analysis of Variance
(MANOVA)
3. Opportunity of adopting
technology in Tax Revenue
System in terms of:
3.1 Perceived Usefulness
3.2 Perceived Ease of
Use

4. Assessment of
Challenges on
Implementation of e-
invoicing significantly
influences Opportunities of
Taxpayers via e-invoicing
of filing Tax Revenue
System

Figure 2. Conceptual Framework

 23

ADAMSON UNIVERSITY

A conceptual framework “lays out the key factors, constructs or variables and presumes

relationships among them”, according to Miles and Huberman. The conceptual framework of the

study shows the Input, Process and Output.

For the Input, Independent Variables were placed. It consist of Demographic Profile

(Name of Company, Age, Gender, Tax Expertise, Highest Educational Attainment, and Years in

Service) of respondents; Challenges of adopting technology in Tax Revenue System;

Opportunity of adopting technology in Tax Revenue System (Perceived Usefulness and

Perceived Ease of Use); and Assessment of Challenges on Implementation of e-invoicing

significantly influences Opportunities of Taxpayers via e-invoicing of filing Tax Revenue

System.

An arrow connecting the Input to Process. This includes all the methods that the

researchers used in Data gathering such as Survey Questionnaire as the Research Instrument;

Data Gathering Process; and Statistical Treatment (Frequency and Percentage, Normality

test and Multivariate Analysis of Variance (MANOVA))

After the Process, an arrow connects it to the Output. This consisted of the product of the

study. It will also shed light to the statement of the problem specifically, it will provide the

Guide towards better tax compliance.

Synthesis

Many researchers have contributed to the identification of challenges and opportunities of

electronic invoicing processes. Analysis has been done on challenges and opportunities in

implementation of electronic taxation system in a bid to establish how each influences the tax

compliance. Researchers have also pointed out ways in which organizations can use various

ways to achieve and also to improve services being offered by the organizations. The gap in
 24

ADAMSON UNIVERSITY

previous studies and this study has attempted to address are some of the factors affecting service

delivery in this sector.

CHAPTER III

Research Design

This study involved a quantitative design to reinforce the research and make the study more

reliable and valid. The aim of quantitative research is to achieve greater knowledge and

understanding of the social world (Williams, 2021). Researchers use quantitative methods to

watch situations or events that affect people. Quantitative research produces objective data which

will be clearly communicated through statistics and numbers.

The descriptive method was also utilized in this study. The main purpose of descriptive

research design is to supply and describe systematically, factually, accurately and objectively a

situation, problem, or phenomenon. It is a scientific and subjective approached wont to describe

life experiences and provides them a meaning (Seville, 2020). This research is usually related to

words, language, and experiences. It develops an understanding of people's opinions about their

lives and therefore the lives of others. It also helps the researchers to get an in-depth account

which will present an active picture of the research participants' reality.

Data Management

A questionnaire was chosen as data collection instrument of this study. Questionnaire is

one of the most widely used tools to collect data in research.

 25

ADAMSON UNIVERSITY

The questionnaire was divided into three (3) parts. For Part I (Demographic Profile of

Respondents), this section was asked about the students’ personal information (Name of

Company, Age, Gender, Tax Expertise, Highest Educational Attainment and Years in Service).

Part II, will be the Challenges of Adopting Technology in Tax Revenue System which is

compose of five (5) statements. Part III will be a set of statements about Opportunity of adopting

technology in Tax Revenue System. Respondents can answer the questionnaire by carefully

deciding what they ever feel about a statement. They can rate their answer by choosing one out

of the 5-poing Likert Scale given such as:

1 – Strongly disagree 2 – Disagree 3 – Neutral

4 – Agree 5 – Strongly agree
The researcher will use Statistical Package for Social Sciences (SPSS) version 22 in

calculating the data that will be gathered.

Sampling Design

The researcher will use Non-probability sampling design as it is a method of selecting

units from a population using a subjective or non-random method. Since non-probability

sampling does not require a complete survey frame, it is a fast, easy and inexpensive way of

obtaining data.

Specifically, the researcher will use Purposive Sampling Technique to determine the

number of samples from the total number of the population. In addition to that, purposive

sampling is used when research requires one to capture knowledge rooted in a particular form of

expertise. It is common to use this form of sampling technique in the early stages of a research

process, when the researchers are seeking to become better informed about the topic at hand

before embarking on a study.

Statistical Treatment
 26

ADAMSON UNIVERSITY

A parametric analysis will be necessary to produce a trustworthy statistical interference

by putting the putative hypotheses to the test. On the basis of the respondents' tax expertise, the

major impact of the challenges on the opportunities will be examined (tax accountants, tax

consultants and tax auditors).

Multivariate Analysis of Variance (MANOVA) will be used by the researcher in this

study as an effective approach for data analysis. Multivariate analysis of variance (MANOVA) is

intended to examine many dependent variables (Opportunities) concurrently (Field, 2018). More

so, MANOVA accounts for the relationship between Challenges and Opportunities by

considering all dependent variables in the same analysis and has the ability to determine if

groups differ along a number of dimensions (Field, 2018).

 27

ADAMSON UNIVERSITY

Part I. Respondent’s Demographic Profile

Name of Company: ________________________________________________________
Age: __
Gender: __ Male __ Female
Tax Expertise: __ Tax Consultant __ Tax Accountant __ Tax Auditor
Highest Educational Attainment: __ Higher National Diploma/Bachelor of Science
(HND/BSc)
__ MBA
__ PH.D.
Years in Service: ___
Part II. Challenges of Adopting Technology in Tax Revenue System
The following are a number of statements about Challenges of Adopting Technology in Tax
Revenue System. Read each statement carefully and decide if you ever feel that way about a
statement. Then, indicate how you feel by choosing the appropriate rating on the 5-point scale.
Each scores represents corresponding stress level such as:
1 – Strongly disagree 2 – Disagree 3 – Neutral
4 – Agree 5 – Strongly agree
Statements 1 2 3 4 5
1. Low speed internet connectivity is the main problem.          
2. Tax payers and tax officials might require a lot of time and          
effort to be familiarized to the new system of taxation.
3. Monthly visits to submit tax declarations result in          
high compliance costs and opportunities for corruption
4. E-filing allows firms to file online.
Reduces in person interactions with tax officials
5. Limited capacity to enforce tax given lack of cadastral.
 28

ADAMSON UNIVERSITY

Part III. Opportunity of adopting technology in Tax Revenue System

The following are a number of statements about Opportunity of adopting technology in Tax
Revenue System. Read each statement carefully and decide if you ever feel that way about a
statement. Then, indicate how you feel by choosing the appropriate rating on the 5-point scale.
Each scores represents corresponding stress level such as:
1 – Strongly disagree 2 – Disagree 3 – Neutral
4 – Agree 5 – Strongly agree

A. Perceived Usefulness
Statements 1 2 3 4 5
1. Electronic taxation can reduce the barest minimum the          
cases of tax evasion in Philippines
2. The fusion of information and communication technology          
into taxation can lead to a significant blockage of existing
loopholes.
3. Filing taxes electronically is more efficient and effective          
than manual methods of tax filing in all ramifications.
4. Electronic taxation can help enhance proper perception of
tax authorities by tax payers.
5. A substantial reduction in tax compliance cost incurred by
tax administration can only be made possible by the use of
technology in tax system.

B. Perceived Ease of Use

Statements 1 2 3 4 5
 29

ADAMSON UNIVERSITY

1. The use of technology in tax system in the Philippines is          

reasonably high.
2. There are measures put in place by the electronic system of          
taxation to guarantee the security of tax payer’s account
against fraud practices.
3. Taxation will be more efficient and effective since most of          
the people know how to use computers.
4. Despite the challenges of technology, the objectives of
having and implementing electronic taxation is achievable and
attainable.
5. Electronic taxation system do not requires high-spec
devices to run the system.

References

Ainsworth, R. T. 2016. “The Digital VAT.” Virginia Tax Review, 25(3), 875-938.

Allingham, M. G., & Sandmo, A. 2020. “Income Tax Evasion: A Theoretical Analysis.” Journal
of Public Economics, 1, 323-338.

Alm, J., & McClellan, C. 2017. “Tax Morale and Tax Compliance from the Firms’ Perspective.”
KYKLOS, 65(1), February, 1-17.

Alm, J., & Torgler, B. 2019. “Do Ethics Matter? Tax Compliance and Morality.” Journal of
Business Ethics, 101, 635-651.

Bărbuţă-Mişu, N. 2019. “A Review of Factors for Tax Compliance.” Economics and Applied
Informatics, 1 (1), 69 -76.

Barraza, F. 2016. Electronic Invoice (VAT) [PowerPoint slides] Retrieved from

http://www.oecd.org/site/ctpfta/37569089.ppt.

Barros, T., & Madelaine, E. 2019. Formalisation and Verification of the Chilean Electronic
Invoice System, RR-5217, 55. <inria-00070777>

Bird, R. M., & Oldman, O. 2018. “Improving Taxpayer Service and Facilitating Compliance in
Singapore.” The World Bank Prem Note, 48 (December).

Bobek, D., Hageman, A.M., & Kelliher, C.F. 2018. “Analyzing the Role of Social Norms in Tax
Compliance Behavior.” Journal of Business Ethics, 115 (August), 451-468.

Chen, S., Miau, S., & Wu, C. 2019. Toward a Smart Government: An Experience of E-invoice
Development in Taiwan. PACIS 2014 Proceedings. Paper 124. Retrieved form
http://aisel.aisnet.org/cgi/viewcontent.cgi?article=1266&context=pacis2014.
 30

ADAMSON UNIVERSITY

Committee on Payment and Settlement Systems, BIS, 2018. Statistics on Payment, Clearing and
Settlement Systems in the CPSS countries.

Cummings, R. G., Martinez-Vazquez, J., Mckee, M., & Torgler, B. 2019. “Tax Morale Affects
Tax Compliance: Evidence from Surveys and an Artefactual Field Experiment.” Journal of
Economic Behaviour & Organization, 70, 447- 457.

Denmark. Agency for Modernisation Ministry of Finance. Electronic Invoicing Handbook [PDF
document]. Retrieved from http://www.modst.dk/~/media/Files/Regnskab/Filer%20uden
%20link/Betaling/Elektronisk%20fakturering/Electronic_invoicing%20pdf.ashx.

Gartner. 2019. The Future of E-invoicing. Gartner RAS Core Research Note G00166951.

Harrison, G., & Krelove, R. 2017. “VAT Refunds: A Review of Country Experience.” IMF
Working Paper (WP/05/218).

Heinemann, F., & Kocher, M. G. 2018. “Tax Compliance under Tax Regime Changes.”
International Tax Public Finance, 20, 225-246. DOI 10.1007/s10797-012-9222-3.

Institute of Financial Operations. 2018. Global E-invoicing Study. Retrieved from

http://www.3dcommunication.fr/3dcomm/files/Basware%202012%20Global %20E-Invoicing
%20Study.pdf.

International Telecommunication Union. 2017. “Measuring the Information Society.” Retrieved

from http://www.itu.int/ITUD/ict/publications/idi/index.html.

Kamarulzaman, Y., & Azmi, A. 2010. “Tax E-Filling Adoption in Malaysia: A Conceptual
Model.” Journal of E-Government Studies and Best Practices, Vol. 2010.

Keen, M. 2017. “VAT Attacks!” IMF Working Paper (WP/07/142).

Keen, M., & Smith, S. 2017. “VAT Fraud and Evasion: What Do We Know, and What Can Be
Done?” IMF Working Paper (WP/07/31).

Kim, H., & Park, M. 2017. Research on Estimation of Tax Compliance Cost. Seoul:
Korea Institute of Public Finance.

Kim, J. & Suh, H. 2019. “A Study on the Additional Tax Related with Electronic Tax Invoice”
(in Korean). Accounting Information Research, 3(3), 355-382.

Kleven, H. J., Knudsen, M. B., Kreiner, C. T., Pedersen, S., & Saez, E. 2021. Unwilling or
Unable to Cheat? Evidence from a Tax Audit Experiment in Denmark. Econometrica, 79(3),
651-692.

Koch, B., & Billentis. 2018. E-invoicing/E-billing, Key Stakeholders as Game Changers.
Retrieved from http://www.basware.com/sites/default/files/restricted/Billentis_Market_Report
 31

ADAMSON UNIVERSITY

_2014.pdf.

Korea Institute for Electronic Commerce. 2019. Guide to Development of Standard Electronic
Tax Invoice (V3.0).

KPMG, Germany (2017). VAT Essentials. Retrieved from

http://www.kpmg.com/global/en/issuesandinsights/articlespublications/vatgstessentials/pages/
germany.aspx.

KPMG. 2018. Mexico-New Developments in E-invoicing. Retrieved from

http://www.kpmg.com/global/en/issuesandinsights/articlespublications/global-indirect-taxbrief/
pages/mexico-new-development-sine.aspx.
Lee, B. 2017. “Research on VAT - New Initiatives to Broaden Tax Base Including Cash Receipts
and Electronic Tax Invoices.” Rational Development Direction of VAT (78-79). Seoul: Korea
Institute of Public Finance.

Mai, H. 2020. “E-invoicing, Final Step of an Efficient Invoicing Process.” Deutche Bank
Research. Retrieved from
https://www.dbresearch.com/PROD/DBR_INTERNET_ENPROD/PROD0000000000257196/
Einvoicing%3A+Final+step+of+an+efficient+invoicing+process.pdf.

Niu, Y. 2019. “Tax Audit Impact on Voluntary Compliance.” Journal of Economic and Social
Measurement, 36(4), 237-251.

Oh, K. 2017. “A Study on Actual Conditions and Reform Measures of Electronic Tax Invoice.”
Research on Tax, 19(2), 181-205.

Papp, T. K., & Takáts E. 2018. “Tax Rate Cuts and Tax Compliance - The Laffer Curve
Revisited.” IMF Working Paper (WP/08/7).

Park, C., & Yi, K. 2017. “Development and Distribution of XML Standard Tax Invoices.”
Journal of Society for e-Business Studies, 16 (3), 263-274.

Piaggesi, D., Sund. K., & Castelnovo, W. 2017. Global Strategy and Practice of Egovernance:
Examples from Around the World (Google eBook).

PricewaterhouseCoopers. September, 2020. “Study on the Feasibility of Alternative Methods for

Improving and Simplifying the Collection of VAT through the Means of Modern Technologies
and/or Financial Intermediaries.”

Schmandt, P., & Engel-Flechsig, S. July 2018. The Transposition of the EU’s 2010 Electronic
Invoicing Directive by EU Member States and the Resulting Legal Landscape. Journal of
Internet Law. Retrieved from http://www.mcginnislaw.com/images/uploads/news/2013-
07_Schmandt_Journal_of_Internet_Law_Transposition_of_EUs_2010....pdf.
 32

ADAMSON UNIVERSITY

Singapore. Inland Revenue Authority of Singapore. (December 2018). IRAS e-Tax Guide,
Recordkeeping Guide for GST-Registered Businesses (3rd edition). Singapore. Retrieved from
http://www.iras.gov.sg/irasHome/uploadedfiles/eTax_Guide/etaxguide_Record%20Keeping
%20GST%20registered%20businesses_2013-12-31.pdf.

Singapore. Inland Revenue Authority of Singapore. (October 2019). IRAS e-Tax Guide, GST:
General Guide for Businesses (2nd edition). Retrieved from
http://iras.gov.sg/irasHome/uploadedfiles/eTax_Guide/etaxguide_GST_GST%20General
%20Guide%20for%20Businesses_2014-10-08.pdf

Snow, A., & Warren JR., R. S. 2019. “Ambiguity about Audit Probability, Tax Compliance, and
Taxpayer Welfare.” Economic Inquiry, 43(4), 865-871.

Song, H., & Sung, M. 2020. “Effects of Personal Income Tax Deduction for Credit Cards Usage”
(published in Korean). Public Finance Research, 5-2 (73), 157-194.

Tagkalakis, A. O. 2018. “Audits and Tax Offenders: Recent Evidence from Greece.” Economics
Letters, 118, 519-522.

Tait, A. A. 2018. Value Added Tax: International Practice and Problems. Washington, D.C.
International Monetary Fund.

Taiwan Today. (May 6, 2018). Paperless Transitions Promote Taiwan E-commerce. Retrieved
from http://taiwantoday.tw/ct.asp?xItem=190188&CtNode=429.

The Economist. May 17, 2019. Tax Collection in Latin America, Electronic ArmTwisting.
Retrieved from http://www.economist.com/news/finance-andeconomics/21602274-reduce-tax-
fraud-governments-encourage-automatedaccounts-electronic.

Toro, J. 2015. Tax Administration On-line: A Strategic Option for Delivering Taxpayers
Services and Promoting Tax Compliance [PowerPoint slides] Retrieved from
http://www.sii.cl/aprenda_sobre_impuestos/presentaciones_director/2005/micros_team/
microsoft_team.pdf.

United Kingdom. House of Lords. European Union Committee. May 2017. Stopping the
Carousel: Missing Trader Fraud in the EU (HL Paper 101). London. United Nations. 2014, 2012,
2010, 2008, & 2003. Global E-government Survey.
http://www.unpan.org/egovkb/global_reports/08report.htm.

United States. Government Accountability Office. April 2018. Value-Added Taxes, Lessons
Learned from Other Countries on Compliance Risks, Administrative Costs, Compliance Burdon,
and Transition (GAO-08-566). Washington, D.C.

Yilmaz, F., & Coolidge, J. 2018. “Can E-filing Reduce Tax Compliance Costs in Developing
Countries?” The World Bank Policy Research Working Paper (WPS6647).
 33

ADAMSON UNIVERSITY